The Incentivizing Small Business Employee Retention Act of 2026 expands tax incentives for small businesses by extending the Work Opportunity Credit through September 30, 2030, and introducing a new multi-year credit structure. Under this enhanced provision, qualified small businesses can claim additional tax credits based on wages paid to employees in their second through fifth years of employment, with the credit percentage increasing from 50 percent to 100 percent over that period. The bill also doubles the annual deduction limit for expenditures made to remove architectural and transportation barriers for individuals with disabilities and older adults from $15,000 to $30,000, while explicitly including improvements to internet and telecommunications accessibility in this category. Additionally, the legislation requires the Treasury Department to submit annual reports to Congress through 2030 detailing the number of businesses using the new credit, their employee retention rates, and the overall fiscal impact of these changes.
The Meals for Communities Tax Credit Act creates a new tax incentive for restaurants and retail food establishments that donate prepared meals to qualifying charitable organizations. Eligible businesses can claim a credit equal to 50 percent of the fair market value of their donations, with the value of each individual meal capped at $14, subject to annual inflation adjustments starting in 2027. The total credit available to any single taxpayer is limited to $50,000 per year, and businesses cannot also claim a standard tax deduction for the same donated meals. This provision becomes effective for taxable years beginning after December 31, 2025.
The Reverse Big Ugly Tax Breaks for Data Centers Act removes specific tax incentives for large-scale data centers and artificial intelligence facilities. It excludes these facilities from bonus depreciation, a provision that currently allows businesses to deduct the full cost of certain equipment in the year it is purchased. Additionally, the bill prevents these properties from qualifying as opportunity zone business property, which would otherwise offer significant tax benefits for investments in designated areas. The legislation targets structures with a power capacity exceeding 50 megawatts that are dedicated to data storage, processing, or AI operations.
The American Tariff Rebate Act establishes a one-time tax credit for eligible individuals in the first taxable year beginning in 2026, providing a base amount of $2,000 (or $4,000 for joint filers) plus an additional $600 for each dependent. The bill mandates that these rebates be distributed as advance payments to taxpayers who filed returns for the 2025 tax year, with provisions allowing the IRS to use data from prior years or Social Security records for those who have not recently filed. To fund this program, the legislation permanently rescinds approximately $91.5 billion in previously appropriated funds designated for border infrastructure and detention capacity. Additionally, the bill repeals extended reduced income tax rates and lowers the estate and gift tax exemption amount to $10 million per individual.
The Affordable Housing Incentives Act allows property owners to avoid paying capital gains taxes when they sell real estate to qualified housing operators for use as affordable housing. To qualify, the property must be subject to a binding legal agreement that ensures it remains affordable or used as a homeless shelter for at least 30 years. The sale price cannot exceed the value determined by a professional appraisal, and the seller must notify the Treasury Department within 90 days of the transfer. The Treasury is required to audit these properties every five years to verify they continue to meet the affordability requirements throughout the 30-year period.
This bill creates a tax exemption for money received by individuals who participate in approved clinical trials, allowing them to keep compensation and expense reimbursements without paying federal income tax. It also ensures that these payments are not counted as income or resources when determining eligibility for federal or federally funded assistance programs. The changes apply to any payments made after December 31, 2025, and are designed to help participants in studies covering a broader range of diseases and conditions.
This bill creates a new tax incentive program to encourage investment in specific areas designated for maritime industries, such as shipyards and ports. It allows certain census tracts identified by the Secretary of Commerce, in consultation with federal officials, to be treated as qualified opportunity zones, which offers tax benefits to investors who put money into businesses operating within those areas. To qualify, the businesses must be directly involved in maritime activities like building or repairing vessels, and the program is limited to a maximum of 100 designated zones. The changes to the tax code will take effect after December 31, 2026, with the initial selection process for these zones beginning by July 1, 2027.
The Data Center Tax Accountability and Disclosure Act of 2026 modifies tax rules and establishes reporting requirements for large data centers. It removes a tax incentive known as bonus depreciation for artificial intelligence data centers unless they meet specific green building standards, such as LEED Platinum or Gold certification. Additionally, the bill requires operators of data centers consuming at least 25 megawatts of power to submit detailed annual reports on their water and electricity usage, emissions, and backup power systems to state or federal agencies. These reports must be made public, and the law prohibits companies from using confidentiality agreements to hide this information. Operators who fail to comply with these reporting requirements face daily civil penalties of up to $100,000 for intentional violations.
The Increasing Opportunity For Reindustrialization Act designates census tracts containing former Department of Defense installations as Qualified Opportunity Zones. This change allows communities near closed military bases to access federal tax incentives intended for economic development, even if they do not meet the standard low-income requirements. The bill specifically amends the Internal Revenue Code to include these areas in the program and increases the number of eligible zones per state to accommodate them.
The American Shipyard Investment Act of 2026 creates a new tax credit to encourage investment in U.S. shipyards that build or repair commercial and military vessels. This credit allows taxpayers to deduct 25 percent of their qualified investments in these facilities from their taxes, increasing to 35 percent for projects located in designated economic zones. The law defines eligible investments as property used for constructing, repairing, or manufacturing parts for ships and sets a deadline of December 31, 2033, for when the property must be put into service. Additionally, the bill permits businesses to transfer unused tax credits to other entities and provides an exemption from a specific alternative tax on shipping activities.
